Wallace v. Hartford Fire Insurance

RICE, J.,

Dissenting. — This action, as I understand it, is for damages for failure on the part of appellant insurance company to perform a preliminary contract to insure the personal property of respondent. The trial court found that such contract was entered into on or about the second day of June, 1913. I am of the opinion that there was substantial evidence to sustain the findings of the trial court. (Eames v. Eame Ins. Co., 94 U. S. 621, 24 L. ed. 298.) It seems to be well settled that insurance companies may enter into such preliminary agreements. In McCabe v. Aetna Ins. Co., 9 N. D. 19, 47 L. R. A. 641, 81 N. W. 426, the court said: “That an insurance company can, by a preliminary parol contract, bind itself to issue or to renew a policy in the future, seems too well settled to admit of doubt.”

*490In the ease of Campbell v. American Fire Ins. Co., 73 Wis. 100, 40 N. W. 661, the court said: “That a person may maintain an action to recover damages for the breach of a contract to insure is well established by the authorities, and the damages in such a case is the sum which the policy was to insure, if the property to be insured, and which was destroyed by fire during the time of the life of the policy, as it was agreed to be issued, was of the value to be insured by the policy. Upon this question there is no dispute.” This case is distinguished in the opinion from that of Taylor v. Phoenix Ins. Co., 47 Wis. 365, 2 N. W. 559, 3 N. W. 584. These principles are supported by the following authorities: Benner v. Fire Assn. of Philadelphia, 229 Pa. St. 75, 140 Am. St. 706, 78 Atl. 44; Sproul v. Western Assur. Co., 33 Or. 98, 54 Pac. 180; Mobile Marine Dock & M. Ins. Co. v. McMillan, 31 Ala. 711; Angell v. Hartford Fire Ins. Co., 59 N. Y. 171, 17 Am. Rep. 322; King v. Cox, 63 Ark. 204, 37 S. W. 877.

Appellants quote Ostrander on Insurance as authority against the validity of such a contract, but as stated by the court in Benner v. Fire Assn. of Philadelphia, supra, the argument in Ostrander is not convincing.

In this ease it appears that the damages are sought as the result of the failure to perform the agreement. The material allegations of the complaint upon this issue are: “That on or about the second day of June, 1913, plaintiff and defendants, Hartford Fire Insurance Company and Lee A. Strickfadden, entered into a certain contract wherein and whereby the defendants promised and agreed that they would .... execute and deliver to plaintiff .... a policy of insurance .... upon the personal property above described . . . . ; that on or about the eighth day of July, 1913, . . . . of said personal property an amount thereof in excess of the value of $3,000 was destroyed by fire . . . . ; that after said fire plaintiff for the first time learned that defendants had failed and neglected to write said policy of insurance . . . . ; that by said failure and neglect of defendants to write said policy of insurance in accordance with said agreement, plaintiff has been and is damaged.....” The court found: *491“That on or about the second day of June, 1913, plaintiff and defendants, Lee A. Striekfadden and Hartford Fire Insurance Company, entered into a certain contract, wherein and whereby said defendants promised and agreed that they would .... execute and deliver to plaintiff .... a policy of insurance .... upon the personal property above described . . . . ; that plaintiff believed and relied upon the said agreement of the defendants .... and did not procure any other insurance; that defendants negligently and carelessly failed to write, execute and deliver the policy of insurance . ; that 'by the said failure and negligence of defendants to write said policy of insurance, in accordance with the said agreement, plaintiff was damaged.....”

It does not appear that damages were sought on account of the failure of appellants to perform any duty required by law, independently of or in addition to or aside from the agreement of the. parties. Upon tracing the claim for liability for damages to its source it appears to originate in the alleged breach of the contract itself, and hence I am of the opinion that the action is one on contract and not one in tort. The authorities cited by my associates, in which causes of action were said to sound in tort, were, I think, cases where no contract existed as a basis for an action, but were cases where the liability arose out of the neglect to perform a legal duty resting upon the insurance companies, or their agents, aside from any contract of or for insurance. It is clear that both the agent and the company are not liable on the contract. It is also clear from the evidence in this ease that the agreement was made with Striekfadden as agent and not as principal. (See McCabe v. Aetna Ins. Co., supra.)

It appears that the policy which it was agreed should be written was to have been for $1,200 on the stock of merchandise and $300 on the furniture and fixtures. The findings of the trial court do not segregate the amount of the loss due to the destruction of the stock of merchandise from that due to the loss of fixtures. The entire loss, either on the fixtures or on the stock of merchandise, may have been covered by a *492payment made by another insurance company. The findings, therefore, do not support the judgment.

I think the judgment should be reversed, and the action dismissed as to appellant Striekfadden and a new trial granted.

Petition for rehearing denied.